On February 6, the Bush Administration submitted its fiscal year 2007 defense budget request to Congress. The $439.3 billion in budget authority requested for FY 2007 represents an increase of $28.5 billion (about 7 percent) over the enacted level for 2006. The FY 2006 enacted level, however, does not include a request for supplemental appropriations for defense. Thus, the precise level of increase or decrease in the overall Department of Defense budget from FY 2006 is uncertain … The U.S. needs to ensure that its armed forces receive sufficient funding. While funding levels should be determined by needs and requirements, they could be established at 4 percent of GDP without harming the U.S. economy.
Baker Spring thinks he is advocating an increase in defense spending that he would fund by cuts in transfer payments such as Social Security benefits, Medicare, and Medicaid. The Bureau of Economic Analysis, however, notes that Federal defense spending for calendar year 2006 was $621 billion or 4.7% of GDP. But if you take a look at his chart 1 – you would have thought we were spending a lot less. I’d like to correct the record in two ways. First, our graph shows defense spending as a share of GDP using the data from the Bureau of Economic Analysis. Our chart certainly paints a different picture than the chart provided by Baker Spring. Of course, one could argue that the defense spending/GDP ratio of later was less than it was during the Korean War. But as I noted here:
Our graph shows defense spending (as reported by the Bureau of Economic Analysis) was 4.73% of GDP in 2005. In 1953, it was 14.73% of GDP. Then again real GDP in 2005 was about 5.3 times higher than real GDP in 1953. So after adjusting for inflation, it would seem we were spending 70% more in absolute terms in 2005 than we were in 1953 at the height of the Korean War.
The folks at Heritage don’t seem to know whether they want more defense spending or less as they don’t seem to have a clue as to how much we are spending on defense.